Chinese telecom equipment maker Huawei Technologies Inc. is suing the U.S. government over a law that restricts the use of its gear in American networks for security reasons, arguing it amounts to an abuse of process that damages its reputation as telecoms prepare to spend billions on 5G technology.

Huawei, a leading 5G equipment supplier, filed a lawsuit in federal court in Texas to challenge the constitutionality of Section 889 of the 2019 National Defense Authorization Act, rotating chairman Guo Ping announced in a press conference livestreamed on social media from Shenzhen on Thursday morning.

The section bans federal agencies and their contractors from using telecom gear from Huawei or ZTE Corp., another Chinese telecom supplier. Huawei argues the law abuses due process by singling out Huawei with the implication it’s a tool of the Chinese government and therefore a security risk.

“The U.S. government has never provided any evidence supporting the accusation that Huawei poses a cybersecurity threat,” Guo said. “Even worse, the U.S. government is trying to block us from the 5G market in other countries.”

Guo, who also accused the U.S. government of hacking Huawei’s servers and stealing its emails, insisted that Huawei has not and will never implant backdoors in its equipment. He added that Huawei operates in 170 countries and is a global leader in 5G technology.

“Maybe the U.S. government incorrectly believes it would benefit from the suppression of Huawei. But the truth is, restricting Huawei’s contribution to American and other 5G networks will only harm their networks.”

Huawei’s chief legal officer Song Liuping described the lawsuit as a “purposeful and punitive” attack on Huawei, accusing Senator Marco Rubio of smearing the company as a “Trojan horse.”

Guo said the lawsuit was a “proper and last resort” and hopes the court will lift the ban so Huawei can work with the U.S. government to address its security concerns.

This marks the second lawsuit Huawei has filed in North America in less than a week. Last Friday, it filed suit against the Canadian government for allegedly violating the rights of Huawei chief financial officer Meng Wanzhou when officials arrested her in Vancouver in December on an extradition order from the U.S.

In January, the U.S. formally charged Meng and Huawei with bank and wire fraud related to business dealings in Iran. Meng remains under house arrest in Vancouver while her lawyers fight the extradition order. China has subsequently charged two Canadians with spying, a move that’s largely seen as retaliation for Meng’s detention.

The lawsuit also comes as telecoms around the world, including in Canada, shop for equipment to build 5G networks, the technology needed for real-time applications like self-driving cars.

In line with American security concerns, Australia blocked Huawei from its networks while countries including New Zealand and Germany are mulling whether to follow suit. Canada and the U.K., both of which host facilities that test Huawei equipment for security flaws, are reviewing the use of Huawei in 5G networks. Some carriers, including Telus Corp., have said a Huawei ban could delay the roll out of 5G networks.

Restricting Huawei’s contribution to American and other 5G networks will only harm their networks

Huawei’s top competitors are Sweden’s Ericsson and Finland’s Nokia Corp.

At the press conference, Huawei’s cybersecurity officer John Suffolk argued that European labels still contain products made in China thanks to the global supply chain.

“Just because you have a name on a box doesn’t mean it all comes from that vendor,” Suffolk said.

Only 30 per cent of Huawei’s equipment comes directly from Huawei, he said, while the rest comes from the global supply chain. In 2016, Apple Inc. had 346 suppliers based in mainland China and made half its iPhones there, he added.

He called for an international effort to create global cybersecurity standards and best practices.

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